Commerce Secretary Lutnick's Indecent Proposal

Have you no sense of decency, sir?

By now, you have probably seen the viral video of Commerce Secretary Howard Lutnick, asking us to imagine a world in which Social Security fails to send out monthly benefit checks on time. As I wrote earlier this month, the Social Security Administration (SSA) has been around for more than 85 years, and it has never missed a payment. If that were to change, it would cause anger, hardship, and, for the roughly 1-in-4 Americans who rely entirely on Social Security for their income, maybe even loss of life.

Our Callous and Clueless Commerce Secretary Disagrees

To try to persuade us that it would be no big deal if those checks didn’t go out on time, Lutnick tells a story about his 94-year old mother-in-law. “She wouldn’t call and complain,” he said. She would simply assume that there was some sort of payment glitch, and she would wait patiently for for the issue to be resolved. Maybe the money would come next month. No big deal.

As clueless as that was, Lutnick actually went further. He argued that you can identify a “fraudster” by waiting to see who calls to complain about not getting their check. Apparently, only liars and cheats rely on Social Security to get by.

It was a disastrous appearance, and Lutnick was rightly pummeled for his callous remarks over the weekend.

Here’s former Republican National Committee (RNC) Chair, Michael Steele, with a rant so intense that it provoked the expression on the right of the screen from one of his co-hosts. (Click below to play the clip.) “You insensitive lug. How dare you!”, Steele demanded. “Your momma’s not gonna worry” because you’re worth 4 billion dollars! “Take your ass into a community where they don’t have those resources available to them.” Then he called Lutnick an “arrogant SOB.”

This is the kind of stuff that’s causing republican members of Congress to cancel town halls and hide from their constituents. It’s the kind of stuff that drew more than 85,000 people to events with Senator Bernie Sanders and Congresswoman Alexandria Ocasio-Cortez in recent days. And it probably explains why a growing number of republicans are privately complaining about the cosplaying president—Elon Musk—who has publicly threatened to eliminate Social Security.

The Third Rail of American Politics

Republicans would do well to remember their history. There’s a reason they call Social Security the “third rail of American politics.”

In 1964 Barry Goldwater lost the presidency in a landslide to Lyndon Johnson in part because of the perception that Goldwater was hostile to Social Security. But it wasn't until the early 1980s that Social Security became known as the third rail of American politics. It was House Speaker Tip O'Neill who coined the phrase and O'Neill who, more than anyone, made Social Security murderous to touch.

Although Ronald Reagan had defended Goldwater in a speech in 1964, he reversed course when he campaigned for the presidency in 1980, pledging to preserve Social Security. In 1981, with Social Security facing imminent shortfalls, President Reagan was urged to back a proposal to cut $80 billion from the program “by reducing aid to students of retired workers, cutting disability payments, tightening eligibility requirements (saving $21.9 billion over five years), and reducing early retirement benefits (saving $17.6 billion over five years).”

The principal architect of the plan was David Stockman, Reagan’s budget chief. Although Reagan was led to believe that it would enjoy bipartisan support, lawmakers balked when it became clear that a low-income worker retiring at age 62 in 1982 would instantly suffer a 33% cut in benefits under the plan. Stockman later admitted, "I just hadn't thought through the impact of making it effective immediately."

With Elon Musk hinting at a sinister plan to eliminate Social Security altogether and Commerce Secretary Lutnick callously musing about skipping payments, today’s republicans are right to be worried. For they surely know this history:

After months of defeats, O'Neill finally had an issue he could rally Democrats around. At a news conference he declared: "For the first time since 1935 people would suffer because they trusted in the Social Security system." A reporter asked if Reagan had made a political mistake. O'Neill shot back: "I'm not talking about politics. I'm talking about decency. It is a rotten thing to do. It is a despicable thing." Republicans knew they were in trouble when the phones started ringing off the hook from workers who had planned to take early retirement in 1982. Representative Carroll Campbell of South Carolina complained: "I've got thousands of sixty-year old textile workers who think it's the end of the world. What the hell am I supposed to tell them?"

A quick vote in the Senate on a Republican resolution showed how badly Reagan had miscalculated. On May 20 the Senate voted 96 to 0 in favor of a resolution promising not to "precipitously and unfairly reduce early retirees' benefits."

Ultimately, Reagan was able to make significant cuts to Social Security.¹ While painful, these “reforms” were mostly phased in gradually, which is part of the reason they got away with it. In exchange, voters were told that the program’s “financial difficulties” were being dealt with once-and-for-all. That turned out not to be the case, however, because no one on the Greenspan Commission anticipated the income inequality that accompanied the rise of the billionaire class.

So here we are.

No politician is using the MMT lens to defend the program, and a handful of billionaires are moving as fast as they can to destroy the most beloved federal program in American history. In so doing, they are throwing a lifeline to an otherwise rudderless Democratic Party. As word of Lutnick & Co’s indecency spreads, the phones will ring louder and the rallies will grow larger. The question is: What will democrats do to harness all of that anger?

1. See here for details on the so-called Greenspan Commission and its “reforms” (i.e. cuts).